The Issue The issue to be resolved in this proceeding concerns whether the Petitioner Donna Danzis is a retired state employee and is entitled to reinstatement of her policy of State Life Insurance Plan.
Findings Of Fact The Petitioner was an employee of the Florida Department of Children and Family Services (DCF) through October 28, 2005. On October 28, 2005, she voluntarily terminated her employment. At the time she terminated employment she had been covered under the Plan. The Plan is made available to state employees and retirees through the DSGI, in accordance with Section 110.123, Florida Statutes (2006). The terms and conditions of employee participation in the plan are provided for in Florida Administrative Code Rule Chapter 60P-3. The Petitioner was a cancer patient at times pertinent hereto and that may have played a role in her decision to terminate her employment. In any event, her employment termination was voluntary and occurred during a time apparently when she was undergoing chemical therapy concerning her cancer issues. Prior to the time she terminated her employment on October 28, 2005, the Petitioner did not discuss her plans to retire with DCF Human Resources Personnel. She had, however, apparently applied for disability retirement, although that disability retirement status had not yet been determined or granted at the time she terminated her employment. After termination of employment, on or about November 24, 2005, the Petitioner contacted DCF personnel office and spoke with Mr. Harvey Whitesides. During that conversation, Mr. Whitesides determined that the Petitioner had had deductions from her paycheck to cover premiums for three types of insurance coverage: state health insurance, a group life insurance plan, as well as state security insurance. The later type of insurance is an optional supplemental life insurance that is not a part of the Plan. In that November 24, 2005, conversation with Mr. Whitesides, the Petitioner told him that she had terminated her employment with the state but did not inform him that she had applied for disability retirement. During their conversation she told Mr. Whitesides that she wanted refunds that she was entitled to from the state health insurance and group life insurance plans. Mr. Whitesides was supervisor of payroll for DCF and its predecessor agency from 1993 through 2002. In that position his duties included management of the benefit section and retirement operations within the DCF. While her performed his duties as supervisor he would commonly assist employees in their preparation of the forms necessary to affect retirement. Mr. Whitesides retired in 2003, but returned to DCF as an employee in March 2004. Beginning in June 2004, he assumed the duties of DCF personnel services specialist. In July 2005, his position and duties were transferred to the Agency for Persons With Disabilities. Since returning to state employment in March 2004, Mr. Whitesides duties have been substantially the same as those he performed from 1993 through 2002. These included the processing of benefits and retirement requests submitted by employees. In the course of performing those operations he has always assisted employees in the completion of the form required to apply for retirement. Since 1993, Mr. Whitesides has used a "continuation/termination form," for retiring employees who upon retirement wished to continue their state group life insurance. Beginning in March 2004 when he returned to state employment, Mr. Whitesides had access to and used that same continuation/termination form. He did not offer the form to the Petitioner during their conversation on November 24, 2004, however, because the Petitioner did not then inform him that she had applied for retirement. Mr. Whitesides did not learn that the Petitioner had applied for retirement until he received a letter from the Division of Retirement (DMS) dated December 14, 2005, which asked that the DCF provide information and data necessary to calculate Ms. Danzis retirement benefits. Mr. Whitesides provided the date requested by DMS, including the "Florida Retirement System Pension Plan Salary Certification." Prior to the receipt of the letter dated December 14, 2005, the Petitioner had not informed anyone in the DCF personnel office that she had applied for disability retirement. Florida Administrative Code Rule 60P-3.014 requires that an employee who retires and is covered under the life insurance plan must elect one of the following options: (1) submit a request to continue coverage during retirement accompanied by a personal check or money order for one full month's premium, which must be received by the employee's former agency and forwarded with the original application no later than 31 calendar days after the last day of employment; or (2) that the retiring employee must submit a request to terminate coverage under the life insurance plan no later than 31 calendar days after the employee's last day of employment. That rule goes on to provide that an employee who applies for disability retirement and has not received approval of that prior to his last day of employment but who is covered under the life insurance plan on that last day of employment has the option to continue coverage in the life plan pending such retirement disability approval or rejection by submitting a request to continue coverage in accordance with Florida Administrative Code Rule 60P-3.014(1)(a) and by paying the full premium for each month's coverage by personal check or money order to his or her former personnel office. Concerning employees or retirees off the payroll, if it is determined that none of the required contribution by the end of the coverage month the coverage will be cancelled and the retirees coverage will be terminated effective the first day of that month. A retired employee whose coverage is terminated in accordance with subsection (1) or (2) of Rule 60P-3.010 may not re-enter the Plan. The Petitioner did not submit a continuation/termination form within 31 days of the date of her termination of employment stating that she wished to continue her participation in the plan, and provide the other information required by Florida Administrative Code Rule 60P-3.014(1)(a). The Petitioner did not submit a month's premium for life insurance within 31 days after the last date of her employment. The only notice that Ms. Danzis gave, or attempted to give, was notice that she was voluntarily terminating her employment and that her last date of work would be October 28, 2005. Because she did not elect to continue her participation in the life insurance plan through the proper procedure and filing, the Agency canceled her life insurance, thus generating the subject dispute.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Management Services, Division of State Group Insurance determining that the Petitioner failed to properly elect to remain a covered retiree of the State Life Insurance Plan, and that the Petition be dismissed. DONE AND ENTERED this 4th day of April, 2007, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with Clerk of the Division of Administrative Hearings this 4th day of April, 2007. COPIES FURNISHED: Donna Danzis 7744 State Road 100 Keystone Heights, Florida 32656 Sonja P. Mathews, Esquire Department of Management Services Office of the General Counsel 4050 Esplanade Way, Suite 260 Tallahassee, Florid 32399-0950 Sarabeth Snuggs, Director Division of Retirement Department of Management Services Post Office Box 9000 Tallahassee, Florida 32315-9000 John Brenneis, General Counsel Division of Retirement Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact Edward Berk, Respondent, was at all times here relevant licensed as an ordinary life, including disability, insurance agent to represent Founders Life Assurance Company, Standard Security Life Insurance Company of New York, American Variable Annuity Life Assurance Company, Wisconsin Life Insurance Company, Columbian Mutual Life Insurance Company, and Lone Star Life Insurance Company. He is licensed as a disability insurance (2-40) agent to represent American Family Life Assurance Company of Columbus and an ordinary life (2-16) agent to represent Estate Life Insurance Company of America. (Exhibit 1). On April 12, 1979 Respondent pleaded guilty in the U. S. District Court for the Southern District of New York of violation of 18 USC 1341 and 1342 to wit: unlawfully, willfully and knowingly devising and intending to devise a scheme and artifice to defraud and to obtain money from The Travelers Insurance Company by means of false and fraudulent pretenses, representations , and promises. He was found guilty and sentenced to two years imprisonment on each of five counts, the sentences to run concurrently. The execution of the sentence was suspended and Respondent was placed on probation for a period of two years (Exhibits 2)
Findings Of Fact Respondent is currently licensed as an Ordinary-Combination Life, including Disability Insurance Agent to represent Interstate Life and Accident Insurance Company and as a General Lines Agent Limited to Industrial Fire to represent Interstate Fire Insurance Company. (Exhibit 37) During the period June 1, 1974, until October 1, 1976, Respondent was an agent for Gulf Life Insurance Company. In his application for licensing by Petitioner on the application dated July 3, 1974, Respondent listed his date of birth as December 14, 1928 (Exhibit 36), on the application dated June 28, 1975, Respondent listed his date of birth as November 11, 1928 (Exhibit 35), and on his application dated October 5, 1976, Respondent listed his date of birth as November 14, 1926 (Exhibit 34). By affidavit dated January 4, 1978 (Exhibit 33), Respondent declared he was born November 14, 1926. On March 15, 1974, John L. Harris was issued life insurance field policy No. 745 676 678 (Exhibit 1) and weekly premiums were paid continuously on this policy. He was also issued whole life policy No. 715 090 733 on October 18, 1971 (Exhibit 2), and weekly premiums were paid continuously on this policy. Although Harris paid the premiums each week when due to the Respondent, at one period these premiums were not remitted to Gulf Life and the policies lapsed. Immediately thereafter, on May 1, 1975, an application for new policies (Exhibit 5), was submitted to Gulf Life by Respondent with the name of John Harris in the space for the signature of the proposed insured. This signature was not that of Harris and Respondent signed the application as a witness to Harris signature. Gulf Life issued a policy to Harris (Exhibit 4) based upon this application. Evidence was presented that similar procedures were followed by Respondent in Gulf Life policies issued to Frances Harris, Dorcas Cohen, James Cohen, Joe Bryant, Peggy Hanie Bryant, Wilma Hanie and Brenda Bryant, whereby policies serviced by Respondent were lapsed by Gulf Life who later issued new policies on forged applications submitted by Respondent.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Ralph Todd Schlosser, was licensed and eligible for licensure as a life and health insurance agent, health insurance agent and general lines agent - property, casualty, surety and miscellaneous lines by petitioner, Department of Insurance and Treasurer (Department). When the events herein occurred, respondent was licensed as a life and health insurance agent for American Sun Life Insurance Company (ASLIC) and Pioneer Life Insurance Company of Illinois (PLICI). On March 2, 1987, respondent met with one Mildred H. Camp, then a resident of Clearwater, Florida, for the purpose of selling her an ASLIC long term care health insurance policy. After discussing the matter with respondent, Camp agreed to purchase a policy. She completed an application and gave respondent a check in the amount of $511.88. The check was deposited into respondent's business account at First Florida Bank in Clearwater the same day. Camp did not testify at hearing. Therefore, the only first hand version of what was discussed by Schlosser and Camp and the nature of any further communications between the two was offered by respondent. That version was not contradicted, and it is accepted as being credible. Within a week after executing the application, Camp contacted respondent by telephone concerning the policy. Pursuant to that telephone conversation, respondent did not process the application or remit the check to the company, but attempted instead to arrange another meeting with Camp to answer further questions about the policy. Although he telephoned Camp "every single Monday", respondent was unable to arrange an appointment with her until April 30, 1987. On April 30 Camp and respondent met for the purpose of him explaining in greater detail the benefits and coverage under the policy. Because two months had gone by since the application was first executed, it was necessary for respondent to update Camp's health information. Accordingly, Camp executed a new application the same date and Schlosser forwarded the check and application to ASLIC shortly thereafter. On May 5, 1987 ASLIC received the April 30 application and premium check, less respondent's commission. The application was eventually denied by ASLIC on the ground of "excessive insurance" and a refund check was forwarded by ASLIC to Camp on June 11, 1987. There is no record of any complaint made by Camp against Schlosser in ASLIC's files nor did ASLIC contact respondent regarding this matter. When Schlosser began representing ASLIC, he executed a general agent contract which contained the terms and conditions pertaining to his appointment as a general agent for the company. As is pertinent here, the contract provided that Schlosser had a responsibility "to promptly remit such funds" received by him to the company. According to a former second vice-president of ASLIC, Joyce Lynch, who worked for ASLIC when the Camp transaction occurred, the company expected in the regular course of business to have checks and applications remitted by agents to the home office within fifteen days after the application was written, and that the above provision in the general agent contract was interpreted in this manner. Lynch added that she knew of no reason why an agent would hold an application and check for sixty days before submitting it to the company, particularly since once an application is completed and signed, it is the "property" of the company and not the agent. She concluded that if a customer desired more information about a policy after an application had been signed, which is not unusual, the agent still had a responsibility to promptly forward the application and check to the company within fifteen days. At that point, the company, and not the agent, would cancel a policy and refund the premium if so requested by a customer. Therefore, Schlosser breached the general agent contract by failing to promptly remit such funds. On July 28, 1987 Schlosser visited one Maxine Brucker, an elderly resident of Sarasota, for the purpose of selling her a PLICI health insurance policy. He had telephoned Brucker the same date to set up an appointment with her. After discussing the matter with respondent, Brucker agreed to purchase a policy, executed an application and gave respondent a check for $680.00. The check was deposited into respondent's bank account the following day. After Schlosser departed, Brucker noted that Scholosser did not leave a business card and she immediately became "worried" about her money and the possibility of not getting the insurance she had paid for. She telephoned the Department the same day to check on his "reputation" and to verify that Schlosser was an insurance agent. On August 4, 1987 she wrote a letter to the PLICI home office in Rockford, Illinois to ascertain if her check and application had been received but she did not receive a reply. She wrote a second letter to PLICI on August 14, 1987 but again received no reply to her inquiry. After telephoning the home office a few days later, Brucker contacted the Department a second time in late August and requested that it assist her in obtaining a refund of her money. At no time, however, did Brucker attempt to contact respondent. In early September, Brucker received by mail a money order from respondent which represented a full refund of moneys previously paid. Brucker acknowledged that she was happy with her policy when it was initially purchased. She also acknowledged that she had never contacted respondent personally to request a refund of her money. It was only after she received no reply from the home office that she made a request for a refund. According to the agency agreement executed by Schlosser when he became a general agent for PLICI, respondent had the responsibility to "immediately remit to (PLICI) all premiums (collected)". Testimony by Ronald F. Bonner, a vice- president of PLICI, established that in the regular course of business an agent was required to forward the check and application to PLICI no more than twenty-five days after receiving them from the customer. Any application held more than twenty-five days was considered "stale", was presumably invalid and had to be returned to the customer. Even so, Bonner did not contradict respondent's assertion noted in finding of fact 11 that his failure to remit the application and check was based on instructions from the home office, and under those circumstances, was not improper. Respondent readily admitted he did not remit the Brucker application and check because of instructions from the home office received after Brucker had telephoned the home office. After unsucessfully attempting to speak with Brucker by telephone daily for about two weeks, Schlosser voluntarily sent Brucker a money order via mail in early September. A review of respondent's business bank account for the months of March and August 1987 revealed that after the checks from Camp and Brucker had been deposited, the balances in the account thereafter dropped below $511.88 and $680 during those respective months. This raises an inference that those moneys were used for other undisclosed purposes during that time. According to respondent, he submitted applications and premiums checks to the home office approximately two or three times per month. It was also his practice to wait ten days or so after receiving a check from a customer to allow it sufficient time to clear. Schlosser denied having converted insurance moneys to his own personal use. There was no evidence that Schlosser lacked reasonably adequate knowledge and technical competence to engage in insurance transactions authorized by his licenses, a matter requiring conventional factual proof. Similarly, there was no evidence to establish that Schlosser intended to willfully violate the law or that his conduct demonstrated a lack of fitness or trustworthiness to engage in the insurance business.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint filed against respondent be dismissed with prejudice. DONE AND ORDERED this 18th day of January, 1990, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of January, 1990.
Findings Of Fact At all times pertinent to the allegations contained herein, Respondents Richard Elliott Templin, Jr., was qualified for licensure as a general lines agent and as a life and health insurance agent in Florida and represented the Okeechobee Insurance Agency, (OIA), located at 1874 Okeechobee Boulevard, West Palm Beach, Florida. Respondent is currently eligible for licensure as a general lines agent and as a health and life insurance agent in Florida. RAVEN MILLER In March, 1984, Raven Miller applied for and was issued automobile insurance by OIA. She contacted that agency among others and found that it quoted her the cheapest price for the coverage she wanted, coverage sufficient to protect her and the finance company from loss. During the application process, she signed several forms provided to her by the agent who briefly discussed her coverage with her but did not advise her it would include life insurance or accidental death insurance. When she initially went into the office to renew the policy, she asked for coverage on the vehicle but did not desire anything else. The employee with whom she talked indicated understanding of her desires and filled out the required paperwork for her without asking any other questions of her. When the paperwork was completed, Ms. Miller was told that the premium cost would be $347.00 for which she gave a check and received a receipt, plus $110.00 for a term life insurance policy. She was not told that that this latter coverage was separate from the automobile coverage. Ms. Miller filled out nothing during the application process. All the documents were filled out by the clerk. The application form was completely filled out except for her signature when she signed it. It reflected that uninsured motorist coverage was rejected but Ms. Miller was not asked by anyone at the agency if she desired that coverage. When she inquired about deductibles, she was advised there was a mandatory $250.00 deductible and though she is reflected to have rejected bodily injury coverage, this was not discussed with her, either. The only form that Ms. Miller filled out personally was the pink application to Fortune Insurance Company, (Fortune), on which she identified her "beneficiary." This form was not explained to her, however, nor was there any discussion with her of life insurance coverage. Ms. Miller, who works with the Post Office, has $140,000 in life insurance coverage through her job and had she known she was being offered additional life insurance coverage, would have rejected it. When Ms. Miller signed the summary of coverage form, it was completely filled out. The lady with whom she was dealing briefly went over the various items on it but did not discuss them with her or explained anything to her. The confirmation form which she signed was filled out prior to being given to her for signature. The explanation regarding it was brief and she was not advised that life insurance coverage was optional. The life insurance premium was not forwarded by OIA to the company. She did not receive a policy from either Fortune Life or ATA. At no time during her dealings with OIA did she meet or deal with Respondent and she does not know him nor would she recognize him. When she sold her car in March, 1985, Ms. Miller cancelled the policy in person at the agency at which time she was advised that her refund would come in the mail. Even after numerous contacts with the agency to inquire where the refund was, it was not given to her. At no time during her dealings with OIA was she aware of the fact that she was applying for an accidental death policy. All she asked for, all she wanted, and all she thought she was getting was auto insurance sufficient to cover her, her bank, and others with whom she might have an accident in the event of loss. Notwithstanding the fact that Ms. Miller signed an acknowledgment of explanation both at the time of the original policy and and the time of renewal, the explanation in both cases was extremely brief. She asked no questions to speak of and no information was volunteered. In short, at the time of renewal the agency merely renewed the prior coverage. They did not show her what they were comparing with. She assumes that the figures were the same as for the original policy and she assumed that whatever she got was a standard coverage and charge to every applicant. Ms. Miller was satisfied with the coverage she received and the package she purchased. Her complaint to the Department of Insurance related to the failure to receive her refund not to the sale of the insurance to her. In fact, at the time she filed her complaint, she did not even know that she had a life insurance policy. DENNIS AND ALETA NELSON Dennis Nelson, who has worked for the Post Office for approximately 10 years, on or about March 21, 1985 went to the OIA because, having spoken with Respondent over the phone, and having gotten a quote for "full coverage" on his automobiles from him, he liked the price. Mr. Nelson dealt with Respondent who took down the particulars on the cars to be covered, then went to his rate books, and quoted a price to Mr. Nelson which was satisfactory. In doing so, he laid out the explanation of coverage form and indicated what coverage the Nelsons would have. In the course of the application process, there was no discussion of the limits of liability insurance, uninsured motorist Coverage, deductibles, or life insurance. When the paperwork was completed, Mr. Nelson signed the applications for insurance given to him and a premium finance agreement. Respondent explained to Mr. Nelson the application for life insurance and gave him the impression that it was mandatory. It was made mandatory by the company that a customer buy the whole package, but it was not mandatory under the state requirements. The failure to make this distinction is misleading and deceptive. Mr. Nelson never received any policies from any of the companies from whom he was supposed to have received coverage, though he made his premium payments. By the same token, the company did not receive Nelson's premiums from the agency and, therefore, did not issue a policy. Approximately three months after the coverage went into effect, OIA notified the Nelsons that the cost of coverage on their Blazer would be raised by more than $200 for the year. Mr. Nelson made the initial inquiry call to the company writing this coverage but he was poorly treated by company representatives and got no information. Thereafter, Mrs. Nelson went to OIA's Okeechobee Boulevard office and spoke with Respondent who indicated he could not understand it either. Nonetheless, she paid a part of the increase, ($110.00), at the time in cash. The Nelsons checked with other companies and were quoted lower prices. Because OIA could not explain the raise, they went to the Petitioner's local office where they were told that the life insurance coverage they had purchased was not mandatory. As a result, they decided to cancel their coverage with OIA which Mrs. Nelson did in person. When she attempted to fill out the cancellation form, she was told by an agency employee that she could not cancel the life insurance portion only her husband could do that. Mr. Nelson thereafter attempted to reach the Respondent to discuss this situation with him but could never seem to get in touch with him. Mr. Nelson felt he got repeated run arounds from the employees at OIA and was repeatedly referred to the Lake Worth office. When they ultimately received the refund from OIA, it was dishonored and thereafter, the Nelsons were reimbursed for it in cash. ROBERT M. ANDERSON Mr. Anderson, an employee of Pratt and Whitney Aircraft Corporation in West Palm Beach, purchased automobile insurance from OIA in July, 1985. He selected that agency because they offered him the best price for the coverage which he had told them he wanted, which was "the minimum necessary to satisfy state and bank requirements." During the course of his negotiations with the agency, he dealt with an individual known to him as "Rich" but though Respondent looks familiar to him, he cannot identify Respondent as that individual. He advised the individual with whom he dealt what kind of car he had, (a Porche 911), his age, and that he wanted the best deal he could get. In response, the individual gave him a quotation for a 12 month policy which was too high for his budget. He asked for a quote on the rate for 6 months which was quoted to him as $1,816.00, for which he wrote a check. Mr. Anderson thereafter filled out an application package for coverage. The summary of coverage form was not discussed with him in detail. For example, the $2,000 deductible of PIP coverage was not discussed nor were any details or deductibles on other coverages. Accidental death coverage was not discussed with him nor did he request it. He recognizes his signature on certain documents and does not dispute having signed them. However, he does not recall any discussion about them nor does he recall signing a power of attorney form or even discussing the need to have one signed. There was no discussion with Mr. Anderson regarding life insurance coverage and in fact, he would have declined it had it been discussed because he was fully covered through his company's group policy. Mr. Anderson was not prevented from asking questions but did not do so because he did not know what questions to ask. He was given the opportunity to read the forms but did not review them in detail because he did not understand them then and does not understand them now. He did not, however, indicate that he did not understand. Because he had 9 points on his driver's record, he did not ask many questions. He was grateful to get any coverage and did not feel it was appropriate to take the time, as busy as Respondent appeared to be, to ask questions. It was his understanding that everything he got was a part of the "total package" that he requested. Mr. Anderson had no complaint about the coverage that he received. His complaint to the Petitioner was based on his failure to secure a prompt refund from the agency at the time he desired to cancel the coverage, and it was at this time, in discussing the matter with the Commissioner's office, that he first learned he had life and other undesired coverages as a part of his auto insurance package. He has, however, subsequently received the refund requested. All of the individuals referenced above received and paid for as a part of their insurance coverage, membership in an automobile motor club. On policies of this nature, the selling agency retains 90 percent of the premium and remits only 10 percent to the insurer. The motor club membership included a life insurance policy issued by Fortune Life. None of the persons involved with Respondent here knew they were buying either life insurance, accidental death insurance, or motor club membership. All had asked for "total" coverage, desiring thereby only that coverage necessary to operator a motor vehicle legally in this state. Neither life insurance, accidental death insurance, nor motor club coverage is a requirement of the state for the operation of a motor vehicle. It is not unlawful for an insurance agency to make those coverages a necessary part of a package and condition the issuance of liability, property damage, and PIP coverage upon the purchase of a total package including the other. What is improper, however, is a failure on the part of the agency to disclose that the life, accidental death, and motor club coverages are not a part of the insurance requirements of the state and the failure to disclose this is the nexus of the offense alleged.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is, therefore: RECOMMENDED that the Respondent's licenses and eligibility for licensure be placed on probation for a period of two years and that he be ordered to pay an administrative fine of $2,500.00. RECOMMENDED this 27th day of July, 1987, at Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of July, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0093 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. For Petitioner 1-4 Accepted and incorporated herein. 5-7 Accepted and incorporated herein. 8 Accepted and incorporated herein. 9 Accepted and incorporated herein. 10-16 Accepted and incorporated herein. 17-18 Accepted and incorporated herein. 19 Accepted and incorporated herein. 20 Accepted but irrelevant. 21 Accepted and incorporated herein. 22 Accepted. 23-26 Accepted and incorporated herein. 27 Accepted and incorporated herein. 28 Accepted and incorporated herein. 29 Accepted but irrelevant. 30 Accepted and incorporated herein. 31&32 Accepted and incorporated herein. 33 Accepted and incorporated herein. 34 Rejected as unproven. Witness never identified Respondent as the individual with whom he dealt. In the remaining paragraph rulings, it is assumed only that Respondent was involved. 35&36 Accepted and incorporated herein. 37-39 Accepted and incorporated herein. 40&41 Accepted and incorporated herein. 42&43 Accepted. For Respondent Accepted and incorporated herein. Accepted not as a Finding of Fact but as a recitation of the evidence, Accepted in substance. Paragraph is long and involved. See 3 above. See 3 above. COPIES FURNISHED: William Gunter, Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32399-0300 William W. Tharpe, Jr., Esquire Office of Legal Services Larson Bldg. Tallahassee, Florida 32399-0300 David W. Spicer, Esquire Tammy J. Kissell, Esquire NCNB Tower, Suite 910 1555 Palm Beach Lakes Boulevard West Palm Beach, Florida 33401-2363 =================================================================
The Issue The issues to be resolved in this consolidated proceeding concern whether the Petitioner, Abraham Maida's applications to represent certain life insurance companies should be denied based upon his alleged unlawful failure to forward premium funds from insureds to the insurers during the applicable regular course of business. Also at issue are the charges in the Administrative Complaint in the related penal proceeding which concerns the same factual conduct involving the Respondent's alleged failure to forward premiums to the insurers involved in the policy contracts at issue.
Findings Of Fact The Petitioner, Abraham George Maida, is licensed in Florida as a life insurance agent, a life and health insurance agent and a dental health care contract salesman. The Department is an agency of the State of Florida charged with licensing life, health and other types of insurance agents, with regulating their licensure and practice and with enforcing the licensure and practice standards embodied in the statutes cited hereinbelow. Abraham Maida engaged in the business of selling insurance coverage to various employees of the City of Jacksonville. The premium payments for this coverage were collected by payroll deduction from the employees, and lump sum premium checks were remitted over to the Petitioner/Respondent, Mr. Maida, by the appropriate personnel of the City of Jacksonville. Mr. Maida, in turn, was required by his contractual arrangements with the underwriting insurance companies involved and by the Florida Insurance Code, Chapter 626, Florida Statutes, with timely remitting those premium funds over to the insurers who underwrote the risk for the employees in question. Mr. Maida failed to timely remit the premium funds which he collected from the City of Jacksonville to the relevant insurers for the months of February, March and April of 1990, in the case of policy contracts written on behalf of Loyal American Life Insurance Company. Additionally, Mr. Maida failed to timely remit the premium funds received from the City of Jacksonville, after it received them by payroll deduction from its employees, for the months of March, April and May of 1990, with regard to the premium funds due in contracts involving the ITT Life Insurance Company, in accordance with his contract with that company. Mr. Maida failed to timely remit the insurance premiums of James E. Daniels to the ITT Life Insurance Company, as well. The Petitioner/Respondent's contracts with these insurance companies required him to remit premium funds which he received from insureds, within thirty (30) days of receipt, to the insurance company underwriting the risk involved. This the Petitioner/Respondent failed to do for the companies involved in the above Findings of Fact and for those months of 1990 delineated above. In the case of most of the delinquent premium funds due these companies, Mr. Maida authorized them to debit his commission and/or renewal accounts with those companies, which were monies due and owing to him from the companies, in order to make up the premiums which he had not remitted over to the companies involved at that point. That procedure did not defray all of the delinquent premium amounts, however. in the case of ITT Life Insurance Company and the monies owed that company by Mr. Maida, it was established that $10,554.21 of delinquent premium amounts were owing to that company and not timely paid by Mr. Maida. Although he paid the portion of that figure representing the March premium funds due the company for March of 1990, he did not directly pay the premium funds due for April and May of 1990 but, rather, suffered the company to charge those delinquencies, for those months, to his agent's commission account. This procedure still left $4,877.54 unpaid, as of the time of hearing. It was established by witness, Steven Heinicke of that company, that Mr. Maida is their most consistently delinquent agent, in terms of timely remission of premium funds due the company for insurance business which Mr. Maida has written. It has also been established however, that Mr. Maida made a practice of always paying premium funds due the companies for which he wrote insurance in the precise amounts owing, regardless of whether the billing statements to him from those companies had inadvertently understated the amounts which they were due. It was also established that his failure to timely remit the insurance premium funds in question was not due to any intent to defraud those companies of the funds involved or to permanently convert the funds to his own use. Rather, it was established that Mr. Maida's difficulty in timely payment of the premium funds was due to misappropriation of the funds because of financial problems which he was suffering at tee times in question, due at least in part to federal income tax difficulties he was experiencing. There has been no shoring in this record that Mr. Maida is not a competent insurance agent in terms of his abilities and qualifications to fairly and effectively obtain and contract for insurance business with insureds on behalf of the insurance companies he represents. There was no showing that he lacks reasonably adequate knowledge and technical competence to engage in the transactions authorized by the licenses or permits which he presently holds or which he seeks in the licensure application involved in this proceeding.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, and the candor and demeanor of the witnesses, it is, therefore RECOMMENDED: That the Petitioner be found guilty of the violations found to have been proven in the above Conclusions of Law portion of this Recommended Order and that his licenses and eligibility for licensure with the insurers for which license application was made be suspended for a period of three (3) months. DONE and ENTERED this 5th day of June, 1991, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk the Division of Administrative Hearings this 6th day of June, 1991. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-6670 Respondent/Department's Proposed Findings of Fact: 1-7. Accepted. COPIES FURNISHED: Tom Gallagher, State Treasurer and Insurance Commissioner Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Bill O'Neil, Esq. General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level Tallahassee, FL 32399-0300 Norman J. Abood, Esq. Willis F. Melvin, Jr., Esq. 1015 Blackstone Building Alan J. Leifer, Esq. Jacksonville, FL 32202 Department of Insurance and Treasurer 412 Larson Building Tallahassee, FL 32399-0300
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that all charges in Counts I and II against Respondent be DISMISSED. DONE AND ENTERED this 24th day of September, 1981, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 1981. COPIES FURNISHED: David A. Yon, Esquire 428-A Larson Building Tallahassee, Florida 32301 J. Charles Shores, Esquire 310 Southeast 13th Street Fort Lauderdale, Florida 33316 Mr. George Edison 2090 S.W. 29th Avenue Fort Lauderdale, Florida 33312
The Issue This case concerns the issue of whether Respondent's license as an Ordinary Life including Disability agent should be suspended, revoked, or otherwise disciplined for making certain misrepresentations to a Mr. Roger L. Robert in connection with the sale of a life insurance policy to Mr. Robert. A second issue relating to such disciplinary action is whether the Respondent improperly applied to become an insured under a group insurance policy. At the formal hearing, the Petitioner called as witnesses John E. Riley, Roger L. Robert, Angela Stackler, Marie Ellena Mullins, Frederick P. Quinn. The Respondent called as witnesses Baron Kramer, and the Respondent, Stanford J. Sabarsky. The Petitioner offered and had admitted into evidence Petitioner's Exhibits 1 through 7. Counsel for the Petitioner and counsel for the Respondent submitted proposed findings of fact and conclusions of law to the Hearing Officer for consideration. To the extent that the findings of fact herein are consistent with those proposed findings, the proposed findings were adopted by the Hearing Officer. To the extent that the findings herein are inconsistent with the proposed findings the proposed findings were considered by the Hearing Officer and rejected as having been unsupported by the evidence or as being unnecessary to the resolution of this cause.
Findings Of Fact COUNT I As to Count I of the Administrative Complaint, the parties stipulated to certain facts alleged in the Administrative Complaint, and those facts are found as facts in Paragraphs 1 through 9 below: Respondent, Stanford J. Sabarsky, at all times material herein, represented the All American Life Insurance Company as a licensed Ordinary Life, including Disability Agent. Stanford J. Sabarsky did on or about September 16, 1980, contact one Roger L. Robert, President of Freight Sales Centers, Inc. of Tampa, Florida for the purpose of soliciting an application for life insurance from Mr. Robert. At that time and place, Respondent represented to Mr. Robert that he could purchase a seven hundred fifty thousand dollar ($750,000.00) life insurance policy to be issued by the All American Life Insurance Company with an initial annual premium payment of fourteen thousand two hundred and eighty-five dollars ($14,285.00) As a result of said application, the All American Life Insurance Company subsequently issued to Mr. Robert policy number L1124920 effective November 11, 1980, in the face amount of seven hundred fifty thousand dollars ($750,000.00). Premium payments on policy number L1124920 were made by Mr. Robert on a monthly basis from October, 1980, to November, 1981. On or about November, 1981, Mr. Robert received notice from the All American Life Insurance Company that the second annual renewal premium on policy number L1124920 was due. On or about December 4, 1981, Mr. Robert requested that the renewal premium be paid from the cash value of his policy. As a result of the request, the second year annual renewal premium on policy number L1124920 was paid for by a policy loan against said policy, thereby reducing the net insurance protection of that policy. That Respondent, Stanford J. Sabarsky, earned a sales commission due to the issuance of policy L1124920. Prior to purchasing policy L1124920, Mr. Robert was given a sales presentation in his office by the Respondent. It was represented to Mr. Robert, by Mr. Sabarsky, that after the first year's premium was paid, the premium would thereafter be paid by the cash value and he would not have to make any more premium payments. Mr. Sabarsky also explained to him that the cash value could be borrowed out of the policy at approximately seven percent interest. It was Mr. Robert's understanding that after he paid the first year's premium, he would never have to pay out any more money for the life insurance coverage. He expressed this understanding to Angela Stackler, an employee, in the presence of Respondent, and Respondent did not inform him that his understanding was incorrect. In approximately November, 1981, Mr. Sabarsky returned to Mr. Robert's office. At that time, Mr. Sabarsky was questioned by Mr. Robert and his employee Ellena Mullins about the fact that they had received a bill for the next year's premium. In response to the inquiry, Mr. Sabarsky related that the first year's premium would carry the policy and that Mr. Robert wouldn't have to pay any more money. Mr. Sabarsky did not explain to Mr. Robert in November, 1980, or in November, 1981, the out-of-pocket expense which Mr. Robert would have to pay each year in order to borrow the cash value to pay the premium. In order to obtain those loans annually, Mr. Robert, within six years of the policy, would have out-of-pocket interest expense of $3,779.00, and in ten years, would pay interest of $10,163.00 in order to maintain the policy in effect. On April 1, 1982, Mr. Robert, after making inquiry to All American Life Insurance Company, received a letter setting forth the out-of-pocket expenses which would be required of him in order to maintain the life insurance policy in effect. COUNT II As to the allegations of Count II of the Administrative Complaint, the parties stipulated to those facts found in Paragraphs 14 through 16 below. That at all times pertinent to the dates and occurrences referred to in this Administrative Complaint, Respondent, Stanford J. Sabarsky, was qualified and licensed as an insurance agent in this state. On or about January 29, 1979, Stanford J. Sabarsky, while licensed as an insurance agent for Home Security Life Insurance Company, did solicit and sell to Roger L. Robert, President of Freight Sales Center, Inc. of Tampa, Florida, a group disability insurance plan for the employees of Freight Sales Center, Inc. That on or about February 12, 1981, Stanford J. Sabarsky, signed an application to Home Security Life Insurance Company to have his name added to said group disability insurance plan and indicated on said application that he was an employee of Freight Sales Center, Inc. Prior to signing the application on February 12, 1981, the Respondent had asked Roger L. Robert to allow him to add his name to the group disability insurance plan of Freight Sales Center, Inc. As a result of the February 12, 1981, application, the Respondent was, in fact, added as an insured to the group disability insurance policy. He remained as an insured under the policy until approximately May, 1981. In March, 1981, the Respondent submitted a claim to Home Security Life Insurance Company. The claim was paid. The application signed by the Respondent (Petitioner's Exhibit 6) on February 12, 1981, reflected that he worked a minimum of 30 hours per week for Freight Sales Center, Inc, that his date of employment was 1/30/81, and that his base earnings was $600 per week. These facts were not true. At no time from January 30, 1981, to May, 1981, was the Respondent an employee of Freight Sales Center, Inc. The Respondent was aware at the time that he signed the application that he was not an employee of Freight Sales Center, Inc.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department enter a final order suspending Respondent's license as an Ordinary Life including Disability agent for a period of one (1) year. DONE and ENTERED this 12th day of August, 1983, in Tallahassee, Florida. MARVIN E. CHAVIS, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of August, 1983. COPIES FURNISHED: William W. Tharpe, Jr., Esquire Department of Insurance 413-B Larson Building Tallahassee, Florida 32301 George W. Greer, Esquire 302 South Garden Avenue Clearwater, Florida 33516 Honorable Bill Gunter Insurance Commissioner and Treasurer The Capitol, Plaza Level Tallahassee, Florida 32301
